VMware uses Microsoft's playbook against Microsoft

Microsoft's former No. 3 executive, Paul Maritz, is using some of the strategies developed at the software giant to turn VMware into a platform player. His toughest rival: Microsoft.

LAS VEGAS--VMware Chief Executive Officer Paul Maritz is racing to turn VMware's products into a platform for Web applications and services. To succeed, Maritz, who once served as the third-highest ranking executive at Microsoft, is pulling pages from his former employer's playbook to fight the battle.

VMware's Paul Maritz VMware

Maritz oversaw Window's ascendancy to operating system dominance in his 14 years at the software giant, before leaving the company in 2000. Microsoft created a beachhead with Windows, then fortified it with a vast developer network and expanded it with successful productivity applications.

"We're thinking the same way," Maritz said in an interview here during the company's annual VMworld conference. "We have this fairly large beachhead with virtualization."

Though deep in the weeds of technical infrastructure, VMware's lead in virtualization puts it in a position to create a new platform for cloud computing. Its software sits between a computer's hardware and its operating system. VMware wants to take advantage of that layer of technology it's providing to build a new foundation for computer programming.

But just as Windows couldn't have thrived on its own, neither will VMware's platform. So Maritz added a developer piece to VMware's business two years ago, paying $420 million to acquire SpringSource , which makes enterprise and Web application development tools. And he moved to bolster the company's developer evangelism business, hiring his one-time Microsoft lieutenant Tod Nielsen, as chief operating officer in 2009. Nielsen, who ran developer relations for Microsoft in the late 1990s, now has the task of recruiting developers to build applications for VMware's platform.

"The way Tod and I built the whole developer evangelism program in the 1990s is different than the way it's done today," Maritz said. "We're both old dogs who've had to learn new tricks."

One of the biggest differences: focusing on open-source developers. Earlier this year, VMware launched Cloud Foundry, it's so-called platform-as-a-service.

"We believe that platform-as-a-service is going to be the dominant model because the infrastructure requires too much work," Nielsen said.

The idea is to give developers tools they can use to build Web-based applications without having to deal with the mundane plumbing. And it launched Cloud Foundry as an open-source effort in order to appeal to developers.

To build up that muscle, Nielsen brought in another old Microsoft hand, Mark Lucovsky, who the Microsoft brass once thought so highly of that they named him one of the company's 16 Distinguished Engineers. He also gained some notoriety later, declaring in a sworn legal document that Microsoft Chief Executive Officer Steve Ballmer threw a chair and cursed then-Google Chief Executive Officer Eric Schmidt when Lucovsky said he was leaving the company for a job at Google.

To build VMware's platform, Maritz is following one other Microsoft principle--owning the core broad applications that will run on it. For Microsoft, those key applications are the ones in Office--word processing and spreadsheet programs--whose existence made the operating system more valuable.

The platform-as-a-service business is still young, but Maritz believes that collaboration and presentation programs will be key. That's why it recently acquired Socialcast, something of a Facebook for corporations, and SlideRocket, a PowerPoint-like application with slides that can be updated dynamically.

Maritz readily admits that he's not certain if those two will be the must-have applications on the new platform. But he believes the world of work applications is moving toward the sort of services those companies provide.

"When things are moving rapidly, it's better to be too early than too late," Maritz said of the acquisitions.

As Maritz applies the lessons he learned at Microsoft, he finds VMware confronting a familiar foe--Microsoft. The software giant, too, recognizes the emerging platform. And it understands the threat that VMware poses to its Windows hegemony. Top executives at the company list VMware as one of its three most important rivals, along with Google and Apple.

"If you take a look at VMware's aspirations, they describe themselves as having an operating system that sits between Windows and the hardware," said Brad Anderson, corporate vice president of Microsoft's Management & Security Division. "We definitely look at VMware as a very fierce competitor, a competitor that had first movement in the market."

That's why Microsoft has been playing hardball with VMware. Microsoft bundles its virtual machine inside its server software, a move that's helped cut into VMware's market lead. And it's spending money on marketing to lure customers away, launching a clever ad campaign this week that mocks VMware's pricing, featuring a 1970s era sales executive from VMlimited, complete with Fu Manchu mustache, selling virtualization technology from the back of his tricked out van.

It's a tactic Maritz knows all too well.

"I know what drives that company," Maritz said. "It's finding a competitor and locking onto their ankle and never letting go."

Maritz is hoping some of the strategies he developed at Microsoft will help him shake his former employer from its grip.

 

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